Detailed analysis report from Organized Crime and Corruption Reporting Project to unleash the EU money laundering racket.
Extract:
While governments and citizens of Eastern Europe were struggling with the recent financial crisis and trying to borrow money from international financial institutions, billions of euros circulated in the region in an illegal, parallel system that enriched organized crime figures and corrupt politicians.
The system is built on hundreds, maybe thousands, of ever-morphing phantom companies. They exist on paper only and appear to be run by scores of common people, who are, in fact, simply proxies. Many are unaware that their names appear in official documents as the human face of a company. Others are naïve or don’t care.
Crime lords and corrupt government bureaucrats use these paper companies run by proxies to launder illegal billions into usable wealth. The crimes they commit don’t come back to them because of the subterfuge and unwitting proxies are left alone to face the consequences of actions they never performed.
“These methods are used to launder funds in every kind of international crime—human, drug, and weapons trafficking, financial crimes like tax evasion, which has been a cause of the current euro crisis, and terrorist financing. The current system leaves the global financial system wide open for these kinds of crimes,” said Anthea Lawson, head of the Banks Campaign at Global Witness, an international anti-corruption organization.
“One of the main findings here is that 20 to 25 percent of opiates which are being produced worldwide are being seized. When it comes to cocaine, that figure rises to approximately 40 percent. When it comes to money laundering, we are talking about an order of magnitude of 0.2 percent,” said Thomas Pietschmann, of the United Nations Office on Drugs and Crime (UNODC) Studies and Threat Analysis Section.
The Organized Crime and Corruption Reporting Project (OCCRP) has identified some of these companies involved in the laundering business.
They share common traits. They have no offices, no employees. They pay no taxes and often report no activities to regulators. Their real owners are hidden behind proxies – persons with no connection to them — who stand in as director and shareholders. They are registered by offshore registration agents known to work with organized crime. They are financial phantoms and their only possession typically is a bank account in a Russian or Latvian bank.
Some are closed now. Some have been used even though closed. Others will likely take their place.
The phantom companies, OCCRP found, are intertwined into an unseen global offshore financial platform. They come to light dimly in the arcane details of a few court cases where crimes have been detected. Otherwise, they remain private accounts at private companies doing private deals. Nobody sees the whole puzzle – just a few pieces.
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Detailed link: here
